California's Blue-on-Blue Battle

Perhaps nothing more illustrates the evolving inner class conflict within the progressive political movement than the recent embrace of California as a role model for the rest of the country. The Golden State, maintains John Judis of the New Republic, should provide the game plan for the Obama administration as it seeks a path back to relevance.

As an old-style, and increasingly marginal, Democrat, my response is "say what?" After all, even by the standards of the tepid national recovery, California, for all the celebration, still lags. The state has consistently suffered among the highest unemployment rates in the country – now ranking around sixth at 8.5 percent – and now, according to the U.S. Census, the highest rate of poverty in the country.

Nor is California, as is often alleged, recovering faster than nation overall. Since January 2007, California has ranked 42nd among the 50 states and the District of Columbia. Even today, it has roughly 3.5 percent – over a half-million – fewer jobs than it had five years ago. In contrast, arch-rival Texas, second after North Dakota in percentage jobs growth, has added close to 1 million positions. The recovery has been particularly slow in Southern California; in a recent analysis of U.S. metropolitan job-growth data since 2007, the Los Angeles-Orange County region ranked 39th, while the San Bernardino-Riverside area rated 37th.

Growing split

If anything, what's really emerging in California is a widening demographic and geographic divide between the hard-hit largely minority inner-city areas, such as Oakland and Los Angeles, as well as much of the entire inland part of the state (with the exception of oil-rich Bakersfield) and the wealthy coastal sliver that is home to the rich, famous, predominately white (and aging). One longtime conservative California observer, Victor Davis Hanson, wryly has dubbed this a form of "liberal apartheid."

Whatever one calls it, under the current progressive regime, California is accomplishing the exact opposite of the putative progressive egalitarian agenda. Rather than spread the wealth in the old social democratic model of Roosevelt and Truman, and even Clinton, this recovery, such as it is, has been largely centered among the asset-owning classes. They have benefited from, first, the stock market resurgence and a hypocritically pro-Wall Street regime in Washington and, now, an emerging housing bubble, largely promoted by the Federal Reserve. Meanwhile, vast portions of the middle and working classes have continued to languish.

This division, notes historian Fred Siegel in his upcoming history "Revolt Against the Masses," reflects a long-standing elitist tendency within progressivism that extends to at least the beginning of the 20th century. Starting with such luminaries as Herbert Croly and H.G. Wells, there has been a thread of progressive thought that rejects the essential notion of democracy and supports the notion of a guided economic system administered by a disinterested caste of highly educated "supermen."

In California, this progressive trend has been given full rein, as political power in the state has flowed increasingly to its most affluent corners – notably, San Francisco and Silicon Valley – where social-media hype and environmental management dominate the political agenda. To date, this agenda has been facilitated by an alliance among the minority political warlord class and the extremely well-organized public sector unions, along with rent-seeking crony capitalists, notably those who have benefited from "green" policies.

'Blue-on-blue conflict'

Yet, there are some tentative signs that this political alliance could be endangered, as representatives of more working- and middle-class areas begin to recognize the vast chasm between their interests – largely more and better-paying jobs, and more affordable housing – and those of the reigning gentry liberals. This "blue-on-blue conflict," as the ever-perceptive Walter Russell Mead has dubbed it, may become, given the declining relevance in California of the Republican Party, the most relevant political divide in the state today.

Caught in the middle is the ever-unpredictable but wily Gov. Jerry Brown. In many ways Brown has epitomized the ruling progressive alliance, particularly on issues such as green energy, which has essentially served to transfer money to rich investors, such as Google, from manufacturers, middle- and working-class consumers. At a time when European model countries, such as Germany and Spain, are rethinking their expensive green-energy programs as wasteful and economically damaging, Brown seems determined to stay his course.

Also not likely to be altered, at least for the time being, is Brown's dream of a state high-speed rail network. If ever built, given a funding shortfall of at least $45 billion, it will benefit primarily wealthy travelers and tourists, while the roads, bridges and buses depended on by the masses continue to deteriorate. Recently, a separate proposal for a Victorville-to-Las Vegas "bullet train" failed to win a federal loan, likely dooming it.

Brown may be basking in the temporary glow of the state's short-term budget surplus, but he must know that the long-term pension obligations, at both the state and local levels, and the costs of a vast welfare class are, to use the overused phrase, not sustainable. Without some new engine of economic growth beyond social media, capital gains and property bubbles, the state recovery will never spread to the vast majority of Californians and could nudge the interior parts of the state more toward either penury or even the Republican Party.

Oil and water

In this respect, Brown has made two tentative, but potentially critical, moves toward addressing the health of an increasingly Hispanic interior. First, he has embraced the possibility of oil production using hydraulic fracking, to the alarm of Bay Area gentry liberals, as a means of sparking desperately needed high-wage blue-collar employment. He has found some allies among largely Latino and African American Democrats from working-class districts who recently blocked coastal gentry efforts to prohibit the practice.

The second relates to the all-important issue of water. Western lore has it that, in this historically dry part of the world, whiskey may be for drinking but water is for fighting. By embracing the notion of a peripheral canal up north to assure water supplies to the central and southern parts of the state, Brown has taken on the core concerns of the Bay Area green constituencies. (The fact that San Francisco also relies almost entirely on water from the Sierras is not often acknowledged.)

In the water wars as well, Brown will be able to build a coalition between pro-business Republicans and Democrats who represent the generally more working- and middle-class areas dependent on affordable and reliable water supplies. The imperative to back Brown's efforts will be even greater in the Central Valley and other agricultural areas.

Changing attitudes

Another possible sign of change can be seen in a new effort, supported by business and labor, to begin providing some tax breaks and incentives to firms interested in expanding in the state. In the recent past, budget constraints and a largely anti-business Legislature has limited such incentives, which are used routinely by competitor states such as Texas, Utah and Louisiana. Whether such efforts will make a big difference is questionable, but they are signs of a slowly changing attitude toward enterprise in California.

Yet, such efforts may not be enough, particularly if the current asset bubble propping up state government begins to falter. At the same time, Brown's efforts to circumvent the green lobby on water and energy run the risk of endless lawsuits. Being an economic "Nixon in China" may hold great opportunities for Brown, but at the risk of discord with some of the very interests who have been his political bulwarks. It happened in Brown's original second term – 1979-83 – and could emerge again this time around.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

This piece originally appeared at The Orange County Register.

Photo by Randy Bayne; California Governor Jerry Brown